Shares of Masimo Corp. (MASI) took a massive hit on Monday, dropping 25% in after-hours trading. The hospital equipment manufacturer provided a second-quarter sales projection that fell well below expectations, dampening the outlook for the full year. Masimo, renowned for its patient-monitoring technology, now forecasts second-quarter revenue between $453 million and $457 million, significantly lower than the FactSet estimate of $553 million.
Factors Contributing to Weaker Results
Several issues have contributed to this decline. First, large orders that were initially slated for the second quarter have been postponed to the latter half of the year. This delay has had a notable impact on projected revenue. Additionally, an oversupply of sensors among certain customers has further exacerbated the situation.
Furthermore, an unexpectedly early end to the flu season has affected demand for Masimo’s products. Thinly-staffed hospitals and strained budgets have contributed to reduced demand as well. These challenging circumstances have culminated in a significant decrease in projected revenue for both the healthcare and non-healthcare segments.
Revised Revenue Outlook
Management now expects the healthcare segment’s full-year revenue to range between $1.3 billion and $1.45 billion, down from the previous estimate of $1.45 billion. Moreover, projections for the non-healthcare business have also been revised downward, with expected revenue falling within the range of $800 million to $850 million, compared to the previous projection of $965 million to $995 million.
In light of these significant adjustments, Masimo Corp. faces a challenging road ahead as it works to regain lost ground and mitigate the impact of delayed orders and market factors.
